Cryptocurrencies are a relatively recent product and phenomenon that replaces physical money
(and it's intrinsic value) or products like gold (that have markets behind them) with
an asset that's entirely digital and thus exists only on a computer.
Cryptocurrencies use cryptography to secure transactions across a medium of exchange and
the people behind them typically control the creation of new units.
Cryptocurrencies also help with the transfer of assets online, which is happening on an
increasing basis considering most money exists on computers anyway (with that money being
a virtual currency, which is still tied to actual fiat or physical money).
So, with that in mind, we wanted to break down the top cryptocurrencies out there in
the hopes that at least some of you will bet on the right coin and then make us filthy
rich for pointing you in the right direction!
So hit that subscribe button and notification bell and let's get right into it!
EOS
As we’ll see, every cryptocurrency on this list has its own niche and because most of
those niches have been filled by now, new coins have to simply offer a variation on
an existing coin to gain a following.
EOS does this by implementing a delegated proof of stake system, which allows users
to basically give their voting right to someone else in exchange for a decreased transaction
verification time and also to make the network run more efficiently as a whole.
Because these coins are decentralized, people essentially vote for changes to the system
and while people with more coins have more power, being able to acquire voting cache
this way is an interesting concept that's sure to rile up some who think it will end
to the end of decentralization.
Ethereum Classic
Ethereum Classic is the original version of Ethereum, with the Ethereum that's lower on
this list being the result of a fork that occurred a while back.
That split happened when a decentralized autonomous organization (DAO) that was built on top of
the original Ethereum (pre-fork) was hacked.
That DAO was essentially a venture capital fund based on future distributed applications
and was hacked by one person who took advantage of a loophole in the code that allowed him
(or her, let's be honest it's a him) to essentially siphon off a third of the over $150 million
dollars that the DAO had at the time.
The response to that was the hard fork that created both versions of Ethereum and also
basically made it so the hacker wouldn't be able to access the funds that he had acquired.
But because not everyone switched over to the new version (because it looked a lot like
the bailout that people were using products like Ethereum to protest, basically) not everyone
signed up for the new version of Ethereum and thus Ethereum Classic was born!
Stellar Lumens' XLM
Stellar Lumens' XLM is similar to Ripple's XRP in that it’s attempting to become the
blockchain technology used by the banking system itself.
Most cryptocurrencies actually aim to replace most banks, so the prices for things like
XLM and XRP seem to lag behind the rest of the industry for working with the enemy.
XLM could also end up as a bridge between crypto-currencies, or host other so-called
"anchors" on their Stellar Network.
Dash
Bitcoin was initially created, or at least became of value, because it allowed people
to make anonymous purchases online which came in handy when someone wanted to buy things
on the Dark Web (like drugs, guns or (horribly) people).
To really calm banks and a lot of the money that’s pushed Bitcoin to the price it's
at today, Bitcoin sort of shook a lot of the privacy behind it so it no longer looked like
the slave trading and money laundering coin de jour.
Enter Dash, which while striving to fill that gap has ended up with hundreds of millions
to billions of dollars behind it anyway.
Dash also lives up to its name by offering faster transactions than Bitcoin through its
InstantSend technology.
While we're still in the infancy of the whole cryptomarket, it'll be interesting to see
if coins like Dash end up killing Bitcoin by splitting it up essentially doing smaller
versions of what Bitcoin can do, better than it.
If so, look at Dash as one of the main culprits (hopefully from an investor's point of view,
as well).
Cardano
Built by a team of technology-focused academics and developers, Cardano sought to innovate
an already new an innovative industry.
Written in a "memory safe" coding language called Haskell, Cardano theoretically should
have a lot fewer problems and bugs than its competition.
Cardano's Proof of Stake system personally (and formally) verifies parts of the Cardano
network which means that it’s much safer than the other coins on this list.
It's also found a pretty great way to balance the whole privacy/regulator problem by using
a multi-layer architecture, which means that people who flock to crypto-currencies because
of the privacy behind them can rest assured that the regulators that'll inevitably flood
the crypto market won't be able to access their identities.
That could literally make or break most coins so keep an eye out for Cardano in the future.
Iota
Iota had a huge push recently to overtake Ripple on the list of top coins by market
cap.
A coin that targets the Internet of Things, Iota is unique in that it doesn't utilize
a blockchain in order to lower the computational needs of the network it's being utilized as
or for.
On top of that, it would eliminate the transaction fees associated with that work, which is part
of what makes it so attractive to its target market.
Its breakthrough technology is called Tangle, which removes dedicated miners who are typically
needed to verify transactions on most every other cryptocurrency by having the sender
in a transaction do the proof of work that approves two transactions.
Long story short, it further decentralizes the internet of things by making every user
a node in the network, and from a philosophical standpoint, that's something that people involved
in cryptocurrencies really buy into, which could explain it's rapid rise this year where
it reached $5 per coin.
It also becomes faster the larger it gets, which is the opposite of what most coins do.
Bitcoin Cash
Bitcoin Cash is the result of another fork in the blockchain technology behind Bitcoin.
Bitcoin Cash was a hard fork just like Bitcoin Gold, both of which were responses to Bitcoin’s
apparent scalability problem.
As compared to Visa, which could handle almost 50,000 transactions per second, Bitcoin could
handle around seven, creating a bottleneck that increased fees as well as the delayed
processing of a transaction that didn't fit into a block.
That issue created what was called an "Ideological battle over bitcoin's future" and Bitcoin
Cash was one of the answers to that.
Called (at the time) Bitcoin Improvement Proposal 91 (or BIP91), some thought that they were
essentially kicking the can down the road by not addressing that pesky scalability issue.
It officially started trading as its own block on July 23rd, 2017 and it adopted it's named
thanks to those behind the Chinese mining pool via BTC.
Bitcoin Gold
Like Bitcoin Cash, Bitcoin Gold was a hard fork that occurred a few months after Bitcoin
Cash.
Despite the relatively recent adaptation of Bitcoin Gold, it's already the 8th largest
crypto-currency by market cap.
Bitcoin Gold is primarily aimed at decentralizing Bitcoin mining as a response to mining's move
from CPUs to GPUs then to the ASIC chips that most computers don't have (which means that
most mining has been concentrated to a few large mining operators who can afford to buy
computers with ASIC chips).
Because that gives a small few tremendous power in terms of voting for new features,
Bitcoin Gold attempts to decentralize their power by implementing new safety features
like replay protection and unique address format(s).
Litecoin
Because of Bitcoin's dominance, especially early on in the crypto game, other coins have
positioned themselves as not so much a replacement or competitor but more of a "Me Too!" to Bitcoin.
As you've seen in addition to Bitcoin there’s Bitcoin Gold and Bitcoin Cash and Litecoin
has been positioned as the Silver to Bitcoin Gold's...
Gold.
Like Bitcoin, people can mine Litecoin and it's open source.
The main differences between the two lie in the way transactions go down, namely in the
volume of transactions that Litecoin can handle because of it's faster block generation.
However, there is a downside to this as well as the disadvantage that comes with the higher
volume of blocks will lead to more orphaned blocks.
Whether or not the transaction and the confirmation speed that Litecoin can boast is a relevant
selling point remains to be seen but both are considered moot points by Bitcoin's adherents.
However, considering the volatility that exists in a lot of the crypto markets currently,
you'd think that the quicker the transaction time the less risk involved.
Ripple (XRP)
Most crypto-currencies are decentralized, meaning that no single entity (like a bank)
has the ability to make decisions or change the pricing.
That makes a lot of sense as cryptos were launched really as the response to the financial
meltdown that occurred in 2007-2008 and as a way to revolutionize the international banking
system.
XRP, which is the coin created by the company Ripple, is actually a centralized system that
is attempting to also revolutionize the banking system but is doing so from the inside.
While its price is relatively low at around 25 cents per XRP, Ripple’s goals are to
change the way that banks and people send money internationally.
Typically, money is sent between countries through a system called SWIFT, which takes
2-3 business days and costs a pretty penny.
Ripple's system takes 10 SECONDS and costs a fraction of that pretty penny, which is
obviously very attractive to the banks that do thousands of transactions a day.
XRP is also deflationary, meaning that the coins that exist now are the coins that'll
exist forever, so when you add that to the fact that a small % of coins are destroyed
with each transaction and that banks are already signing up for trials with Ripple's technology,
it’s easy to see why Ripple is thought to have one of the brightest futures on this
list.
It has a real-world use!
Ethereum
Outside of Bitcoin, Ethereum is the King of cryptocurrencies.
Launched in July of 2015 after a crowdfunding campaign, the key of Ethereum is that it's
a programmable blockchain that is also "Turing-complete".
Turing is in reference to Alan Turing, who is considered the father of computing and
was played by Benedict Cumberbatch in the film The Imitation Game.
Something is said to be Turing complete if it can be used to simulate a Turing machine,
so in this case, Ethereum is a programmable blockchain language that can essentially solve
any reasonable computational problem.
While that may not mean a whole lot to the average investor, it clearly means a lot to
the people in the know, and those people dictated that Ethereum should be the runner-up to Bitcoin.
Due to this ringing endorsement, the price soared through last year.
In January of 2017, the price of one Ethereum coin was around $9.30.
By New Years Eve, it sat at over $458.35.
That means that if you had purchased $1,000 worth of Ethereum in January, you'd have netted
nearly $50,000!
Bitcoin
And then there's the King.
Bitcoin was launched in 2009 and has been attributed to Satoshi Nakamoto and is the
crypto to Bitcoin Core's reference client.
Every coin is based on Bitcoin and all of its users hope that it'll end up growing like
Bitcoin as well.
While it was initially known as a way to pay for things online anonymously (preferential
on Dark Web sites like SilkRoad), it was actually set up as a libertarian response to central
banking and the financial crisis of 2008 that virtually crippled many of the economies of
the Western world.
A decentralized system, Bitcoin essentially aims to replace banking as a whole by bringing
the power back to the people.
While it's different from the other coins on this list in terms of how it functions
and why it functions, it's more important to talk about the amazing value that Bitcoin
has provided to its investors.
Peaking at over $16,000 this week, people who invested only $10 when the coin was trading
at between 1 and 3 cents would be millionaires as of the posting of this video.
So if you’re a millionaire thanks to Bitcoin, congratulations!
And maybe send some over my way.